 Hello and welcome to the chart of the week video with me David Madden. Today's date is Wednesday the 3rd of October And the time has just gone 12 20 for this summer time on this chart this this week's chart of the week is Tesco First off the bat the share price is lower on the day on the back of broadly speaking mixed results First half operating profit increased by nearly 24 percent, but it came in well fairly below expectations On a quarterly on a quarterly basis UK and like my sales rose by two two point five percent in second quarter beating expectations of two point two percent It was also the 11th consecutive quarter of UK and like my sales rising cost The customer I continue to be encouraged and the company is well on its on its way to actually achieving its cost Cutting target and the dividend was also increased as well Did also issue a quite a optimistic statement stating that they are on track to achieve their target, so investors are clearly focusing on the fact that the headline first half operating profit could mean a fair bit below expectations But by and large is a lot of positives in the in the in terms of fundamentals in this update Taking a look at the share price action over the kind of big picture if you draw a trend line between the lows here of 2016 and all the way along here We could see with a few exceptions to demonstrate below of a broadly speaking It's been in a fairly solid upper trend after the past two two two and a half years or two years and Nine months my series of higher highs and higher lows In fact only in August Earlier this only whenever six weeks ago back in August stock managed did did did manage actually to hit a four-year High so the big picture in terms of the code the big broad strokes is is clear is clearly Pointing to the upside But if you can assume in take a closer look at the price action since the August high on the 10th of August We can see the share price has been drifting lower This could be cases beginning of a downward trend or could be just a natural correction before that the wider big picture Upper trend resumes so take a look here at the share price since This middle of August it's a bit worried that we've now began to see what could be the beginning of a downward trend Provide we've seen a lower low a lower high a lower low a lower high and yet again another lower low That's back when I'm not back to let but we're not back to levels not seen since August I want the market to add drop load today notice how it actually fell below this red line here the two of them moving average and Not too long ago the two of the moving average did manage to act as both resistance and support in recent Not not too long ago. So therefore it is a fairly significant metric It's also worth pointing out that a gap to the downside is quite bearish It's also a myth in technical analysis that gaps are always filled not always filled, but they are often filled So it was leading me to believe we could see further Pressure to the downside in the near term, but we might see the longer term trend kick in Actually, we could see the share price push higher down the line So in terms near term price action We've fallen down to a level here in around we're currently in around the 215 region If we notice that in the kind of 215 216 region did manage to act and persist in the past It's so it could potentially act as support in the near term even if you do drop below 215 We may find some buyers enter the fold in around the two pound market It's a big psychological number But also we can see that on a few occasions not too long ago the two-pound level of the 200 hence level They've managed to act as support And even if you drift drift below that the market could head back down towards this trend line in around the kind of 193 region So while we remain south of the journey moving average We could see further pain and the share price So we might see a short term a continuation of the short-term sell-off that we're seeing But if the share price does manage to actually Push higher down the line and actually retake the journey moving average We could be looking heading back up towards this yellow line here the one or two moving average which comes in the play at 250 Notice how that one or two moving average acted as a support and resistance on a number of occasions at not too long ago So if it is active as support or resistance that too long ago It makes it more likely it will act as a and a significant metric in the near term If you take out the if you move back above the one or two moving average at two pounds 50 We could be looking at heading back up towards the August high of 266 And if we go beyond that we then be a fresh model your higher territories And we could be looking targeting up around the 275 or 280 region I do any comments on this video or any other videos we've been here at CMC markets Please feel free to leave review at Google reviews, and that's all for me this week. Thank you very much